Managing Insurmountable Debts
One of the best-known ways of dealing with growing or unmanageable debts is filing for bankruptcy. Bankruptcies can stop other legal processes like foreclosures and repossessions. It can also stop debt collectors from calling you. If you are facing the possibility of a bankruptcy, you need to take stock of your financial situation before choosing that option.
Assessing Your Financial Situation
In the most simplistic terms, bankruptcy is when your debts are more than your assets. You will want to take inventory of the big picture of your finances. But what if your debts are not fully more than your assets? You may still need legal help.
Below are a few questions to help you assess your financial situation:
- Have you only been making the minimum payments on your credit cards?
- Are debt collectors calling you?
- Do you know how much you own in total?
- Does facing your finances make you feel scared or out of control?
- Are you using credit cards to pay bills, groceries, or other necessities?
- Have you considered other options, such as debt consolidation?
If you answered yes to a few of these questions, you may want to contact an attorney about stopping the debt collection calls. You have rights under the Fair Debt Collection Practices Act that protect you against unfair debt collection practices.
Knowing the Different Bankruptcy Options
Bankruptcies can be a very long, tedious legal process. Depending on which bankruptcy you choose to file, you may have to repay your debts on a very strict schedule. Learning about the different bankruptcy options is important before filing.
- Chapter 7 bankruptcy — Chapter 7 completely discharges unsecured debts such as credit card debts, medical bills, and personal loans. Once declared, the threat of repossession, garnishment and collection lawsuits must stop.
- Chapter 13 bankruptcy — a Chapter 13 bankruptcy protects certain assets, such as a house or a business, for people with steady incomes. Chapter 13 creates an affordable, steady debt payment plan. At the end of the plan, your remaining unsecured debts are discharged. There are some debt exceptions like student loans, alimony and child support obligations.
- Non-bankruptcy debt relief solutions — If you don’t qualify, or it is not appropriate given your circumstances, you should consider the possibility of other debt relief options. If collection agencies have violated the Fair Debt Collection Practices Act, you are owed compensation for that.
For a more in-depth explanation of these options, please visit our resource Bankruptcy Options for Managing Overwhelming Debts.
Free Consultation — Contact Barshay Sanders Today
We are here to answer your questions and provide debt relief assistance. For a free consultation, call Barshay Sanders at 855-456-2240 or head to our Contact page.